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India Inc records 221 deals worth $9.2 bn in Oct; M&A highest since 2015

India Inc witnessed 221 deals worth $9.2 billion in October, an 11% increase compared to the previous month and double compared to the year ago period, according to the Grant Thornton Bharat Dealtracker released on Monday.   

The number of mergers and acquisition (M&A) transactions in October 2021 stood at 61, as compared to 25 deals in October 2020, marking the highest monthly deal volume since September 2015.  

October 2021’s total M&A transaction value stood at $3.3 billion across 61 deals, which is a multi-fold increase, both in terms of deal volumes and values compared with the deal activity in October 2020. The volumes were driven by domestic consolidation which constituted 79% of M&A volumes.  

Over 75% of deals during the month did not report the deal value, thereby not presenting the whole picture of overall deal values for the month. 

However, the space saw a marquee deal – Tata’s acquisition of Air India from the Government of India for an aggregate value of $2.4 billion. This alone accounted for 73% of the total M&A value in October.   

While this will be the first privatisation since 2003-04, Air India will be the third airline brand under Tata’s table. Currently, it holds a majority stake in AirAsia India and Vistara, a joint venture with Singapore Airlines.   

 “October has been encouraging, both in terms of deal volume and deal value, indicating the continuum in deal activities. While volumes recorded a 2x increase over October 2020, deal values saw a strong 24% increase. said Shanthi Vijetha, Partner, Grant Thornton Bharat said 

The economy is being bolstered by the rapid improvement in high-frequency indicators such as the e-way bills, GST collection, power demand, rail freight and exports growth, etc. The current pace is likely to re-establish economic growth momentum,” he added.   

Positive domestic business sentiment in addition to the ongoing rapid economic recovery across sectors and global economic recovery continues to aid the overall trend, the report stated. 

The month also saw private equity funds inflow in Indian companies amounting to $5.9 billion across 160 deals. While the investment volume almost doubled compared to a year ago period, the value saw an 11% decrease owing to reduced average deal size — from $78 million in October 2020 to $37 million this October.   

Meanwhile, the month saw 14 high-value investments including Tata motors’ EV subsidiary’s fund raiser of $1 billion from TPG Rise Climate and Abu Dhabi’s ADQ. This is the first major fundraising by an Indian carmaker to push clean mobility.  

Driven by the aftermath of the pandemic, the hospitality and leisure, pharma and healthcare, e-commerce, retail and consumer sectors continue to remain active together, sealing 32% of the M&A deals in October. Further, media and entertainment, agriculture, banking, education, manufacturing, professional services and telecom sectors witnessed one deal each during the month.   

Interestingly, October witnessed a trend with only three sectors, including start-up, e-commerce, and education, witnessing high-value investments of over $100 million in a particular month   

The M&A volumes were primarily driven by start-up and IT sectors with over half the deals amounting to $391 million. The previous month welcomed 5 start-ups into the unicorn club – CoinSwitch, Acko General Insurance, Fasos, Licious, and Vedantu.   

The month also witnessed one of the largest Series A funding in the Indian start-up ecosystem with CredAvenue raising $90 million led by Sequoia Capital. 

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